Streamlining of the process for change of ownership of stressed assets outside of Strategic Debt Restructuring (SDR) process, which allows creditors to convert debt into equity and take over the management of defaulting companies.

Under its latest loan resolution plan, the scheme for Sustainable Structuring of Stressed Assets (S4A), RBI has allowed banks to classify at least half the debt involved as a standard assets.

Under S4A, the banks are allowed to split the debt of a stressed company into sustainable and unsustainable halves. While the firm will continue to serve the sustainable half of the debt, the unsustainable half can be converted into long-term equity or equity-like instruments which are held in their investment book.

Under 5/25 scheme, RBI has increased the coverage to all sectors. It has also allowed smaller projects—where banks have at least INR 250 crore exposure—to qualify for this scheme.

Banks are now allowed to classify sustainable half of the stressed debt as standard, even if the case is a non-performing asset (NPA) before invoking the S4A provision. Banks are allowed to write back all the provisions made against the case, if the sustainable part of the debt showed satisfactory performance for a year.

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Government committee lists digital measures to cut cash usage

Source: Indian Express

A committee, headed by former finance secretary Ratan Watal, has suggested ways to encourage digital payments.

Key facts:

The committee has suggested an independent mechanism within the overall central banking structure.

The committee has pitched for greater use of Aadhaar and mobile numbers for making digital payments as easy as cash.

It has also called for inter-operable payments between bank and non-banks as well as within non-banks.

To give the entire digital payments effort a focused boost, in its most significant recommendation it has proposed to make regulation of payments independent from the function of central banking.

The Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) can be given an independent statutory status within the overall structure of the RBI and called Payments Regulatory Board, the committee has suggested. The BPSS currently functions as a sub-committee of the Central Board of RBI.

The committee has called for amendments to the Payments and Settlement Systems Act, 2007 to provide for this board apart from giving an explicit mandate for competition and innovation, open access and interoperability, consumer protection, regulations on systemic risks and data protection.

It has suggested encouragement to digital payments within the government, a suggestion that has already rolled out with government prescribing thresholds and waiving charges.

A ‘DIPAYAN’ fund is proposed from savings generated from cashless transactions to expand digital payments along with a ranking of states, government departments, districts and panchayats to encourage digital payments.

Operations of payment systems like Real Time Gross Settlement (RTGS) and National Electronic Fund Transafer (NEFT) could be outsourced after a cost benefit analysis. These payment systems should be upgraded to 24×7 in due course of time, the committee has suggested.

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3.Islamic State retakes ancient city of Palmyra

Source: The Hindu

Islamic State militants have recaptured the ancient city of Palmyra from Syrian troops.

In winning back Palmyra, the extremist group appeared to be taking advantage of the Syrian and Russian preoccupation with Aleppo, timing its attack to coincide with a major government offensive to capture the last remaining opposition-held neighborhoods in the northern city.

Islamic State militants were expelled by Syrian and Russian forces from the city nine months ago. The militants had spent 10 months in Palmyra, during which they blew up a number of temples and caused other destruction – severing the heads of statues and partially damaging two temples and famous arch.

Palmyra

Palmyra contains the monumental ruins of a great city that was one of the most important cultural centres of the ancient world.

From the 1st to the 2nd century, the art and architecture of Palmyra, standing at the crossroads of several civilizations, married Graeco-Roman techniques with local traditions and Persian influences.

Palmyra is a UNESCO designated World Heritage site and home to some of the world’s most magnificent ancient ruins.

The city is mentioned in the Hebrew Bible and was eventually incorporated into the Roman Empire, before passing to almost all empires to have operated in the region over some 2,000 years.

In view of development of cyclone Vardah over Bay of Bengal, 19 flood rescue teams of NDRF have been prepositioned in coastal areas of Andhra Pradesh & Tamil Nadu as a proactive deployment.

NDRF

The Disaster Management Act has made the statutory provisions for constitution of National Disaster Response Force (NDRF) for the purpose of specialized response to natural and man-made disasters.

Two national calamities in quick succession in the form of Orissa Super Cyclone (1999) and Gujarat Earthquake (2001) brought about the realization of the need of having a specialist response mechanism at National Level to effectively respond to disasters.

This realization led to the enactment of the DM Act on 26 Dec 2005.

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5.The Indo-Pacific potential

Source: The Hindu

Indonesian President Joko Widodo, or Jokowi as he is known is on his official visit to India.

Though Prime Minister Narendra Modi and President Jokowi met on the sidelines of the 9th East Asia Summit in Myanmar in 2014, this is the first time in the two years that they have been in power that they will meet substantively.

Indonesia important for India:

Indonesia is a latent Asian power. It is the world’s largest archipelago, straddling the Indian and Pacific Oceans. It can potentially control virtually all the straits linking the southern Indian Ocean to the South China Sea.

Indonesia can play a stabilising role in the Indo-Pacific region as China is showing its naval muscle in the South China Sea and its strategic and commercial reach through the One Belt One Road initiative.

Medan industrial zone in north Sumatra is strategically important for India. A shipping service from Chennai or Krishnapatnam to Medan via the Andaman Islands could be used to export Indian goods to offset, at least partly, the large imbalance in India’s trade with Indonesia.

India could also learn lessons on tourism promotion from Indonesia — from Bali, for instance, where Indians rank high in the list of nationalities visiting that island. India could also learn from Bali about a more ‘simple’ Hinduism that is relatively free from caste and sectarian divisions.

India is important for Indonesia

Indonesia is a maritime axis requiring a strong naval force to protect its territorial integrity, fishing waters and energy interests, supported and funded by strong economic growth. India can help Indonesia in this regard.

India could recognise Indonesia’s centrality in the Indo-Pacific region and help work towards a future where both countries can be partners for security in the region.

There is, at present, a battle being waged in Indonesia over the role of religion, ethnicity and language that in some ways mirrors India’s own. India has a stake in the diversity of Islam found in Indonesia against exclusive and homogenising influences. Indonesia and India can provide complementary models for the coexistence of religious minorities with majoritarian communities in Asia based on their own traditions of coexistence.

Without entering into a domestic debate on religion, India can strengthen Indonesia’s democratic credentials by advocating its admission in a revived India-Brazil-South Africa forum as a pluralist democracy that is an alternative to what appears to be a rise of intolerance in many democracies.

The India-Indonesia relationship has been one of potential rather than realisation. Notwithstanding the efforts made during the tenures of President Susilo Bambang Yudhoyono and Prime Minister Manmohan Singh, the partnership has not yet gathered traction. Both countries should ensure that this visit is not just another diplomatic formality but is utilised to turn the relationship into one of the defining ones in Asia.

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